Advising a “client” on how to move “grey money” into the U.S. has resulted in an agreed public censure in September for a New York attorney.  The lawyer (along with a number of others) was caught on video by Global Witness, a British-based public advocacy group.  But the sanction raises some questions regarding the imposition of discipline for conduct based on a pretextual situation.

The “client” was actually an undercover investigator who posed as a German lawyer and succeeded in getting appointments with 13 firms (out of 50 he tried) to supposedly get advice on behalf of an undisclosed African government official.  The question from the fake lawyer’s fake client:  how to launder funds described as “gray money” or “black money,” including by buying a New York brownstone, a jet and a yacht.

60 Minutes exposé

The video later aired on 60 Minutes.  (The section on the censured lawyer is here.)  We previously wrote about Global Watch’s sting operation, noting that the bad news was that some of the firms appeared to be on ethical thin ice in their interaction with the investigator (assuming the secret tapes accurately reflected their conduct).  The good news was that 37 firms didn’t schedule meetings with the fake prospect.  (And one lawyer who agreed to a meeting firmly rejected the bait, saying that “it ain’t for me,” and pointing out the Foreign Corrupt Practices Act.)

The American Bar Association’s response to the 60 Minutes segment is here.

Agreed censure for “counseling a client”?

Almost two years after the 60 Minutes piece, the censured New York lawyer entered into a discipline-by-consent agreement based on his meeting with the Global Witness actor.

Significantly, the main charge was counseling “a client to engage in conduct [the lawyer] knew was illegal or fraudulent,” in violation of New York’s version of Model Rule 1.2(d).

Of course, no lawyer should violate that rule.  But the brief opinion of the New York Appellate Division’s First Department reflects no acknowledgment that the person speaking to the censured lawyer was an actor, that there was no bona fide prospective “client,” and that there was never going to be any action taken in response to whatever comments the censured lawyer might have made.  Rather, the opinion speaks of the conduct occurring during “a meeting with a potential client.”

The lawyer’s misconduct was significantly mitigated, the First Department noted, by his cooperation, and the fact that it was a single “aberrational” incident in the lawyer’s 50-year career.  Those factors justified the relatively light sanction — a public censure.

Beware possible counseling traps

This case spotlights the knife-edge you sometimes walk in counseling clients — including that a disciplinary authority might view as sanctionable even conduct undertaken in response to a pretext where there is no actual client.

You can never “counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent.”  But under Rule 1.2(d) you can and should “discuss the legal consequences of any proposed course of conduct with a client.”

And, as Comment [9] explains, you are not precluded “from giving an honest opinion about the actual consequences that appear likely to result from a client’s conduct. … There is a critical distinction between presenting an analysis of legal aspects of questionable conduct and recommending the means by which a crime or fraud might be committed with impunity.”

The stakes now appear higher than ever in getting that distinction right.

Taxi Ride Share Transportation AppThis is a good one for the law school legal ethics class I’m teaching this semester:  If a company’s lawyer approves a policy that may be legal in itself, but the lawyer knows that the company will use it to evade the law, has the lawyer violated ethics rules?

An analogous question arose last week when the New York Times reported that Uber Technologies Inc. used specially-developed software in order to avoid law enforcement stings in cities where Uber’s ride-sharing operation was facing local government opposition.

Within a few days of the report, Uber announced that it had halted the practice, called “greyballing,” which had been used in the U.S. and overseas.  Uber said that the practice was part of its broader efforts to halt all rider conduct that violates its terms of use.

However, the situation still provides a setting in which to consider Model Rule 1.2(d) and your ethics obligations if a client seeks your help in conduct that may be deemed to be pushing the legal envelope.

“Greyballing” a potential rider

As reported by the Times, starting in 2014, Uber apparently put policies in place in cities like Boston, Portland, Oregon and Las Vegas to identify users Uber thought might be city investigators or inspectors who were arranging for rides in order to conduct stings on operations that law enforcement officials questioned as violating city regulations.

After facing initial opposition in many cities where gaps in local regulations made it easy to launch its services, Uber eventually reached agreements with cities so that it could operate lawfully.

But before that point, as the Times described it, “law enforcement officials in some cities … impounded vehicles or issued tickets to UberX drivers, with Uber generally picking up those costs on the drivers’ behalf.  The company has estimated thousands of dollars in lost revenue for every vehicle impounded and ticket received,” the Times said.

To avoid these costs, Uber would try to identify law enforcement officers and keep them out of its drivers’ cars — “greyballing” them.  The digital techniques Uber used to do that included reviewing credit card information to see whether the card was linked to some official institution (e.g., a police credit union), drawing a “geofence” around government offices, and not picking up anyone seeking a ride from there, and searching social media profiles to identify people who seemed to be linked to law enforcement.

When someone who had been “greyballed” did successfully hail an Uber, the company could call the driver in order to end the ride.

What should counsel consider?

Model Rule 1.2(d) bars counseling a client to engage in criminal or fraudulent conduct, or assisting the client in doing so.  But was Uber’s “greyballing” program used for unlawful ends?  If not, there is no legal ethics issue to discuss.  And we certainly do not know what Uber’s legal team considered in advising Uber about the program.

Rule 1.2(d) of course permits discussing with the client “the legal consequences of any proposed course of conduct” and assisting the client in making “a good faith effort to determine the validity, scope, meaning or application of the law.”  A lawyer who conforms to that standard is on good ground.

Likewise, comment [9] notes the difference between opining about consequences and “assisting” in unlawful conduct.  And the “fact that a client uses advice in a course of action that is criminal or fraudulent” does not of itself “make a lawyer a party to the course of action.”  “Presenting an analysis of legal aspects of questionable conduct” is OK; but “recommending the means by which a crime or fraud might be committed with impunity” is not.

Be careful out there…

If you are in a grey area (no pun intended!), where it may be unclear whether you are counseling your client about the bounds of the law or whether you are possibly assisting with improper conduct, it pays to be careful, and to consider getting an outside view about your possible actions.  Check your jurisdiction’s version of Model Rule 1.6(b)(4), which permits you to disclose a client’s confidential information as reasonably necessary in order to obtain legal advice about your compliance with the ethics rules.